07 Feb 2020 Money for the Two Halves of Life

“One cannot live the afternoon of life according to the program of life’s morning; for what was great in the morning will be of little importance in the evening, and what in the morning was true will at evening become a lie.“

Carl Jung said that. The famous Swiss psychologist and psychoanalyst was referring to what he called “the two halves of life.” And while this is by no means a blog devoted to Jungian psychology, I think Jung’s two halves of life ring true and can have a massive impact on the ways we spend, save, and give money in our lifetimes.

But what did Jung mean, exactly, splitting up life into halves? While age isn’t totally irrelevant in this concept, he certainly didn’t intend a simple chronological split. Plenty of people who have attained old age are still very much operating in the First Half, and conversely there are those who are young in years who live squarely in the Second Half.

Instead, Jung was basically saying this: The first half of life is concerned with building a strong sense of identity, importance, and security, often with a focus on achieving recognizable success and maintaining physical health. The second half of life brings with it a realization that there is little real meaning inherent in the building project of the first half, which is necessary but not ultimately fulfilling. The First Half is the foundation and perhaps framing of our life’s house, but the Second Half is what turns that skeleton structure into a home.

Before I go on, I want to make something really clear: Notice Jung is not saying the First Half isn’t important! Far from it. We need a healthy sense of what Freud would have called the “ego,” for without it we have a difficult if not impossible time developing fully as humans. You can’t build a home without a foundation!! But to spend our entire lives in the First Half is to miss the profound meaning and purpose of the Second Half.

So what does money ideally look like in the two halves of life? I’m glad you asked:

First Half

For many of us the First Half begins financially as we are coming out of some sort of university or trade school education, looking for and settling into a vocation, and then progressing in that career (or choosing a different one) for a period of several years, often with the desire to move up the proverbial ladder in our work and social settings. Remembering that we all need to build this foundation, here are a few ways I see to build a healthy one financially:

• Save early and often. The importance of saving as soon as possible is hard to overstate. Focusing first on building an appropriate emergency fund and then moving toward long-term saving and investing cannot happen soon enough. Remember, the First Half is about building a foundation! So if you’re a First Halfer, start as small as you need to, but simply start, and then commit to increasing your saving every time your income increases to avoid the destructive power of lifestyle creep.
• Focus on the big stuff. The first half of life is often full of big-ticket items like home buying, car buying, and student loan repayment, yet folks in the First Half are constantly bombarded with personal finance articles focusing on the minutiae of their expenses–Starbucks trips, Spotify bill, gym membership–rather than those vastly more important cash flows. Don’t make that mistake! Get the big decisions right (hopefully with wise counsel) and then buy yourself the freedom to not worry so much about the minutiae.
• Give generously. I’ve written many times about giving, so I won’t beat a dead horse too much, but I think it’s the most important thing you can do with your money, so start young and make it a habit!
• Remember that the Second Half exists. You can’t really force yourself into the Second Half of life, but understanding it and acknowledging it can help bring into sharper relief the decisions you make in the First Half and keep you from staying in the First Half your whole life. This is one of the major benefits of engaging in the financial planning process earlier rather than later, because a good planner will make that vague, future self feel more real and imminent.

Second Half

Financially speaking, the second half of life begins with a sense of freedom from the rat race, as it were. And remember, this isn’t an age-based thing necessarily, so folks still in the midst of their career may find themselves in the Second Half. The difference between the First and Second Half is that, whether you are retired or not, you are no longer so concerned with proverbial ladders or external validation, but rather find real joy in the simplicity of life, appreciating it as a gift to be received rather than something you think you have much control over. In other words, you ultimately come to a realization that money, success, fame and even health do not serve well as ends in and of themselves, but instead are nothing more (and nothing less!) than means to a greater end. I’ll leave you to wrestle with what those greater ends might be, but the following are what I see as financial characteristics of the Second Half that I hope we all are working toward:

• Assets are tools, not symbols. Folks in the Second Half of life spend money on what really matters to them, rather than as a symbol of what might be socially expected or desired. Second Halfers buy homes, cars, vacations and everything else not with a view toward what those purchases symbolize (i.e., how others perceive them), but rather for the things themselves, and how those things (and experiences) serve the greater ends they have discovered. If you’re in the Second Half, the financial planning process takes on an even greater meaning than in the First Half, because while you no longer view your assets as an end, the end you’ve replaced them with is much more important for you to achieve with the ongoing counsel of a planner.
• Time isn’t money; time is time. Second Half people lead less frenetic lives, plain and simple, because they realize that the value of time cannot ultimately be quantified by dollars. Retired or not, they understand that work is good, but they aren’t slaves to their calendars. Toward that end, one of the most rewarding parts of our work is helping people make amazing trades for time–by intentionally taking a less financially lucrative work role for greater flexibility and sanity, or by prioritizing an earlier transition into retirement, or whatever else folks dream up! The key to this trade is not trading for dead time, but time spent intentionally pursuing what matters to you.
• Control is mostly a myth. Those in the Second Half have come to a realization that everything will go on with or without them, and that healthy understanding of their own mortality gives them the humility to really rest. The financial planning process, then, is not about controlling your future–which is impossible!–but about making wise decisions in the direction of your vision while maintaining the flexibility to respond well when things out of our control impact that vision for good or bad.

So, whether you’re in the First Half or the Second Half of life financially, or whether you feel like you are vacillating back and forth between the two on any given day, our hope is that the work we do is helping you make the most of your journey!